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Values rise on China stimulus hopes

Fri, Aug 10, 2012, 01:00

CAROLINE MADDEN

MOST EUROPEAN markets closed in positive territory yesterday as speculation grew that Chinese policymakers would take more steps to stimulate the world’s second-largest economy.

However, the euro declined against most major peers after economists in an ECB survey cut their 2013 growth forecast to 0.6 per cent from 1 per cent.

DUBLIN

THE SESSION proved a relatively quiet day on the market. “Everybody’s waiting for Katie,” said one broker.

However, providing some direction to the market was food ingredients company Kerry Group, which released a very strong set of half-year figures. The group bounced more than 6 per cent, or €2.20, to €38.50 on decent volume after revising its earnings per share guidance upwards.

Oil exploration company Providence Resources closed more than 2 per cent higher at 629½p in London after announcing it had been offered a new licensing option in five blocks adjacent to the Barryroe field off the south coast of Ireland.

Index heavyweight CRH rose 1.6 per cent, or 25 cent, to just under €15.92 ahead of its first-half results, which are due to be published next Tuesday.

Pharma group Elan also put in a strong performance, advancing 1.8 per cent or 16 cent, to €9.11.

Overall the Iseq index climbed almost 1 per cent to 3,227.60.

LONDON

UK STOCKS rose, extending a four-month high.

The benchmark FTSE 100 Index rose 5.59 points, or 0.1 per cent, to 5,851.51 at the close in London, the highest since April 2nd.

The volume of shares changing hands on the FTSE 100 was 22 per cent lower than the average of the last 30 days, according to data compiled by Bloomberg.

“With traders around the City glued to their screens watching Team GB steadily accumulate more medals, the atmosphere in the markets is almost deathly quiet,” said David Jones, chief market strategist at IG Index in London.

Standard Chartered increased 3.6 per cent to 1,363p as chief executive Peter Sands hit back at a New York regulator’s claims that the bank broke US sanctions, and said he saw “no grounds” for revoking the lender’s license.

Amec retreated 4.8 per cent to 1,103p, the biggest drop since October 4th. The UK-based oil and gas engineer said revenue growth would weaken in the second half and profit margins would be lower than a year earlier.

EUROPE

EUROPEAN STOCKS climbed for a fifth day as Nestlé posted sales growth that beat estimates.

Nestlé, which accounts for more than 3 per cent of the Stoxx Europe 600 Index, advanced 3.1 per cent as higher prices helped to increase revenue.

Novo Nordisk gained 2.3 per cent after the company raised its full-year sales and profit forecasts.

Deutsche Telekom slid 2.3 per cent after saying it had lost more customers in the US than analysts had forecast.

Bankia, the lender Spain nationalised in May, surged 13 per cent to €1.43 for the largest gain on the Stoxx 600.

National benchmark indexes gained in 15 of the 18 western- European markets.

US STOCKS reversed gains in early trade, snapping a four-day advance in the Standard and Poor’s 500 Index.

Monster Beverage tumbled 7.3 per cent after profit and sales trailed estimates. Monster and Atlanta-based Coca-Cola are facing higher costs for ingredients such as sweeteners and plastic for bottles.

E*Trade Financial rallied 6.1 per cent as chief executive Steven J Freiberg was ousted from the brokerage. Frank J Petrilli will serve as interim chief executive while the company seeks a new leader, E*Trade said in a statement.

A board committee that includes the head of its biggest shareholder, Citadel LLC’s chief executive Ken Griffin, will lead the search for a new chief executive, said the company.

Kohl’s slid 1.3 per cent to $51.39. The third-largest US department-store company reduced its fiscal 2012 profit forecast after sales fell in the second quarter.

NetApp dropped 2.8 per cent to $32.05. The seller of hardware and software for storing data was downgraded to hold from buy at Cantor Fitzgerald by equity analyst Paul Mansky.

PulteGroup, the largest US homebuilder by revenue, jumped 4.6 per cent to $12.64 after being raised to overweight at JPMorgan.

KB Home added 6.4 per cent to $10.75, while Beazer Homes USA rallied 5.1 per cent to $2.81 after the two companies were also raised at JPMorgan. – (Additional reporting Bloomberg)